Purpose

To determine the extent of implementation of the four recommendations included in our initial audit report, Medicaid Overpayments for Non-Emergency Out-of-State Inpatient Services (Report 2009-S-35).

Background

Our initial audit report, which was issued on May 3, 2010, examined whether the Department of Health (Department) overpaid hospitals Our initial audit report, which was issued on May 3, 2010, examined whether the Department paid out-of-state hospitals properly for non-emergency services for New York Medicaid recipients.  For the period May 1, 2002 through April 30, 2009, Medicaid made potential overpayments totaling $9.2 million to out-of-state hospitals because the Department did not use the payment method that yielded the lowest Medicaid payment.  Auditors further identified $10.8 million in claim payments for which the Department had not granted the required prior approvals.  Our initial audit report contained recommendations for the Department to recover improper Medicaid payments and adhere to regulations pertaining to the payment and prior approval of out-of-state non-emergency inpatient services.

Key Finding

• Department officials made progress in addressing the issues we identified in the initial audit.  This included the recovery of $292,342 and the Department now reimburses most out-of-state hospitals at New York Medicaid rates.  However, further actions are still needed.  Of the four prior audit recommendations, two were implemented and two were partially implemented.

Key Recommendation

• Officials are given 30 days after the issuance of the follow-up review to provide information on any actions that are planned to address the unresolved issues discussed in this review.

Other Related Audit/Report of Interest

Department of Health: Medicaid Overpayments for Non-Emergency Out-of-State Inpatient Services (2009-S-35)